Why Many Realtors Should Refer Their Short Sale Listings To Specialists

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

If a Realtor is not a short sale specialist, he/she should refer their short sale to a local Realtor who is.

The client-centric reason: It is the responsible thing to do for the client.

The Realtor-centric reason: Someone else does the stressful heavy lifting and the referring Realtor gets paid a referral fee.

The Importance of a Short Sale on the Client's Emotional and Financial Health

We have all heard that buying or selling a house is the biggest transaction for most consumers. The importance of that transaction is eclipsed by the magnitude of a foreclosure or short sale.

The expertise of the short sale Realtor will determine the outcome. A successful short sale enables the seller to avoid foreclosure and sell their house with dignity.

Far Reaching Implications

A successful short sale vs. a foreclosure has far reaching implications, including but not limited to:

  • Debt forgiveness vs. deficiency judgments
  • Credit score implications
  • Reduced length of time until a new mortgage can be obtained
  • The need, or lack of need, for a bankruptcy, whether it is pre-foreclosure or post-foreclosure bankruptcy
  • The emotional advantage of avoiding foreclosure vs. going through a foreclosure
  • Tax implications
  • Potential loss of security clearance for certain employment

Referring a Short Sale Does NOT Indicate Weakness or an Admission of a Shortcoming

The sellers need to move on with their lives. Not every Realtor is trained and organizationally set up to handle short sales. That is OK. That doesn’t make the Realtor a bad Realtor. It just means that she or he doesn’t specialize in short sales, just like the short sales Realtor may not specialize in condos, commercial property, mobile homes, horse farms or a multitude of other real estate specialties.

Referring a Short Sale Listing to a Specialist Shows High Level of Responsibility and Loyalty to the Client

Referring a short sale listing actually shows a high level of responsibility and loyalty to the seller. Rather than diminish the seller's chances of a favorable outcome, the Realtor will refer their short sale to an expert who consistently delivers results.

Realtors Who Are Aspiring to Become Specialists Should First Get Highly Trained and Should Have Mentors

For the aspiring short sale Realtor, all short sale listings are an opportunity to hone your craft. The road to becoming a specialist includes getting comprehensive training on the fundamentals, plus never-ending continuous advanced training. In the beginning, one must be coached and mentored, so not to sacrifice your clients during the learning curve period.

Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

View Dave Halpern's profile on LinkedIndave_halpern twitterhalperndave_facebookDave Halpern QR CodeLouisville Foreclosure Realtors Dave Halpern

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Re-Blogged 7 times:

Re-Blogged By Re-Blogged At
  1. Fernando Herboso - Broker for Maxus Realty Group 01/27/2011 01:02 AM
  2. Lisa Moroniak 01/27/2011 02:35 AM
  3. Gayle Henderson 01/27/2011 03:09 AM
  4. Todd & Devona Garrigus 01/27/2011 04:58 AM
  5. Tony and Suzanne Marriott, Associate Brokers 01/28/2011 02:59 AM
  6. Matt Stigliano 01/29/2011 12:06 AM
  7. Gene Riemenschneider 01/29/2011 12:53 PM
Topic:
Home Selling
Location:
Kentucky Jefferson County Louisville
Groups:
The Lounge at Active Rain
Short Sales Specialists
It's all about them (ThemThem)
The Ninety-ninth Percentile
Diary of a Realtor
Tags:
realtor
credit score
realtors
real estate agents
foreclosures
bankruptcy
louisville ky
deficiency judgment
dh
refer short sale listings

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Rainmaker
337,638
Chris and Berna Sloan
Group 1 Real Estate - Tooele, UT
Tooele UT

Dave, well done. I'm licensed and legally able to sell anywhere in my state. Doesn't mean I should. I can do commercial. Doesn't mean I should. 1031 Exchange? Investment property? Horses? Ranch? We can't get ego involved. Refer it and move along. As far as Matt's (#4) coment is concerned, I agree and I disagree with the conclusion. Yes, we need to be educated and expand our horizons. However, someone else's financial future is not the place to roll the dice. Want to learn a new area of expertise? Get together with a real expert, go to school, get a mentor. Don't practice on me! Excellent info

Jan 27, 2011 10:59 AM #49
Rainmaker
182,088
Sherry Chastain
Hendersonville, Nashville, Old Hickory, Lebanon Tennessee - Hendersonville, TN
Realtor, Selling Homes, Lake Properties,Luxury Homes,Short Sales

I often am confused when an agent that has no training or experience with short sales walks up to me and says "Hey I'm listing a short sale, can you help me with it? I listed it yesterday, what do I need to do now?" Well duh!

Jan 27, 2011 03:44 PM #50
Rainmaker
271,006
Jim McCormack
Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343) - Murfreesboro, TN
Nashville Short Sale REALTOR - Stop Foreclosure
Absolutely correct. Great post.
Jan 28, 2011 01:44 AM #51
Rainmaker
3,044,046
Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Very well written rationale for why agents should refer their short sales to agents who:

Specialize in Short Sales

Have a List to Close ratio of at least 70% (ours is in the 90% plus range overall and 95.83% for 2010)

Have closed at least 25 Short Sales (we have closed more than 50)

Have the ability to escalate Short Sale files to CEO level at the Seller's Lender if need be

 

Jan 28, 2011 02:57 AM #52
Rainer
76,150
Conor MacEvilly
RE/MAX On Market in Ballard. Seattle - Seattle, WA

I agree. Unless you are completely familliar with the complexities of listing a short sale, then don't do it, which is why I stay away from them. The problem is, finding someone who actually knows what they're doing. There's a lot of future litigation down the line from angry people who've lost their homes that were not advised properly. Talk to a real estate attorney before talking with a short sale Realtor 'expert".

 

 

Jan 28, 2011 03:14 AM #53
Rainmaker
524,032
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

So many insightful comments here by Activerain members, this is great. At least 20 of the commentors could and turn their comments into full blown posts with the different opinions and experiences members have had. Looking forward to any spin off posts.

Jan 28, 2011 03:28 AM #54
Rainer
80,813
Gary & April Greer
Century 21 Wright - Temecula, CA
Real Estate Professionals

Not every "expert" should be mirrored or referred to.  Doing something many times does not make every agent great at it.  Some of the agents in my area that are experts and do high volume do sub par work because that is all they have time for.

I personally would prefer a genuine job from someone who has time for me.

Jan 28, 2011 03:45 AM #55
Anonymous
Michael Singh

Dave,  I do agree with you in regards that an agent should have some training and experience in this field of real estate since short sales require a great deal more time and knowledge to say the least.

The California Department of Real Estate has issued a warning regarding the misleading designations, the full warning can be read on the DRE website:

 

Consumer and Industry Warning: False and Misleading Designations and Claims of Special Expertise, Certifications and/or Credentials

By Wayne S. Bell Chief Counsel -- California Department of Real Estate

 

 

 

Mike Singh

Jan 28, 2011 04:27 AM #56
Rainmaker
1,462,079
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

A true expert is someone who not only has the experience, but who has learned from each experience and gotten better and better.

I write for a short sale specialist and have learned that there is a whole lot more to being successful at closing short sales than many agents are willing to do.

Jan 28, 2011 04:29 AM #57
Rainmaker
67,119
Brenda, Ron, Lee Cunningham & Tara Keator
West USA Realty - Phoenix, AZ
Realtors, Homes for Sale - Phoenix Metro

I agree, although classes aren't necessarily what makes them a specialist.  The worst ss I have had so far was being mitigated by a law firm (she hired prior to listing with me).  You could tell they didn't even understand some of the terms I was using. 

Jan 28, 2011 04:40 AM #58
Rainer
37,641
Brad Hornshaw
Brad Hornshaw Realtor Lynnwood, Bothell, Everett - Lynnwood, WA
Realtor, Listing Agent, Buyers Agent, Investments
Hi Dave I think this makes a lot of sense. I personally am new so I am still seeking help on all transactions, but I think on my 1st short sale I will partner up with some one who is good at it. Half of something is better than all of nothing..........Brad
Jan 28, 2011 06:12 AM #59
Rainer
60,032
Dennis & Terri Neal
RE/MAX, Big Bear - Big Bear Lake, CA
Your Home Sold in 45 Days or We Se

If you are unwilling or unable to stay current with the constantly changing short sale rules and environment then referring is in everyones best interest. The seller gets the best representation and you get a referral fee.

Jan 28, 2011 06:59 AM #60
Rainer
18,231
Michael Borger
Oahu Home Buyers, Inc. (HI) and Mercury Home Buyers (CA) - Honolulu, HI
Investor and Cash Buyer in Hawaii and San Diego

Excellent point, as most would agree. It's a mark of professionalism in this or any industry when someone passes a client to another person because they will be better served this way. It also has a 'karma' aspect to it, as the client will look upon you favorable for putting them in safer hands and will likely reward you down the road, whether directly or indirectly.

I'll also say that there are investors will tons of short sale experience as well that can serve the same role -- not just agents and brokers. Yes, that will bother folks who subscribe to the realtor vs. investor school of thought, but the facts are what the facts are. If the overlying sentiment is that to be an ethical professional is to do what's best for the client, then one has to be open to passing that client on to anyone who can serve them in a short sale situation better than an agent without the tools -- and that person could be an investor as well as an experienced broker.

Jan 28, 2011 08:15 AM #61
Rainmaker
407,614
Cameron Novak
The Homefinding Center - Corona, CA
Featured Corona Real Estate Agent Team

I definitely agree... Not only because you're right... but because I'm one of the specialists who would benefit ;-)

Jan 28, 2011 10:31 AM #62
Rainer
26,741
R Grodin
Worland, WY

I agree Dave. Everyone refer their short sales to me!

Jan 28, 2011 03:38 PM #63
Rainmaker
271,985
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Dave - Thanks for adding the additional paragraph.  I think it's important for us (as an industry) to encourage the learning process as much as it is to encourage good habits and client-first attitudes.  I actually referred a short sale to another agent in the recent past as I felt I wasn't in the right spot to help these people.  Unfortunately, the transaction turned into a bit of a nightmare for my fellow agent, but they worked hard and knew what they were doing, so I was pleased to have passed it on.

I didn't mention earlier, but I wanted to make note of this section:

Referring a Short Sale Does NOT Indicate Weakness or an Admission of a Shortcoming

We as agents tend to get flustered when we feel inadaquete, weak, or inexperienced.  I see ego get in the way quite a bit.  We need to learn to let go when we could better serve clients by helping them find a different agent.  We're all not experts at the same things.  I recently referred a listing to someone because they were fluent Spanish speakers, something I saw as a marketing bonus for this particular property.  I didn't want to let a listing go, but knew that it was the right thing to do for the benefit of my client.

Jan 28, 2011 11:54 PM #64
Ambassador
2,820,693
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I was kinda terrified when doing my first one that I would screw up, but hoenstly there is NO short sale "expert" in my MLS.  We've only had a handful in the entire area.  Most homes advertised as "short sales" in our MLS eventually went to foreclosure because agents told sellers they could do that without ever getting the okay from the lender (doh)  But because my market is primarily vacation homes where owners can well afford the payments (even when they are underwater)  I took the class, read the blogs, consulted with the closing attorney & got through it.  The sellers don't owe a defficiency, won't be getting a 1099 on it either.  The buyer is happy and I'd say I've managed to do at least 10% of the short sales in my area since that first one.  But... do I send sellers out of our market?  as there is no "expert" locally.

Jan 29, 2011 12:20 AM #65
Ambassador
552,628
Larry Story
Total Care Realty - Greensboro, NC
Total Care Realty, LLC, Greensboro, NC Real Estate

Dave,

I agree with you about referring out transactions in which we don not have the skill set to properly represent the client. Yes the agents commenting on this post also make a point about how we learn by doing.  Unfortunately, just like many other segments of our industry unless you are going to become a "Commercial agent" for example then I caution you to not take such clients on.   These are all more specialized fields that if you are not going to do these transactions on a ongoing basis then refer them out.  Our duty to represent our clients to act in their best interest is in question if you constantly take on clients that we have no experience or training in. 

Jan 29, 2011 12:28 AM #66
Rainmaker
1,431,110
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Great post Dave.  Short Sales are very complex.  I am closing one on Monday and I will tell you it was not easy.

Jan 29, 2011 12:51 PM #67
Rainer
131,561
Monica Atherton
The Associates Realty Group - Temecula, CA
Your Temecula Real Estate Gal

I have navigated a couple of short sales on my own (1 loan and serious hardship) and have used a professional negotiator for the others.  No two short sales are alike, but I have found that my negotiator has come across alot in her years of handling these and has more tolerance with the banks than me.  Its a win/win.

Feb 13, 2011 04:43 AM #68
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Dave Halpern

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